Formosa lifts Point Comfort chlor-alkali force majeure in US

HOUSTON (ICIS)–Formosa Plastics USA has lifted the force majeure at its 910,000/ECU (electro-chemical unit) chlor-alkali plant in Point Comfort, Texas, ICIS confirmed on Tuesday morning.

The plant is back and running at “a majority of its operations,” company officials said in an update emailed to market participants late on Monday.

The force majeure was declared on Tuesday 18 April after heavy rains and flooding rendered the plant “inoperable”, the company said at the time.

The plant has production capacity of 910,000 tonnes/year for chlorine and 1m dmt (dry metric tonnes)/year of caustic soda. Formosa’s force majeure covered caustic soda and chlorine-derived products from the plant, including ethylene dichloride (EDC).

A chlor-alkali plant produces both chlorine and caustic soda through the electrolysis of salt brine in a ratio of 1 ton of chlorine to 1.1 dst (dry short tons) of caustic soda, together equaling one electro-chemical unit.

The company’s vinyls plant continued to operate through the outage using existing stocks of EDC on hand, company officials told market participants. 

The outage prompted greater sentiment of tight supply in the US Gulf, where plant maintenances and booming export sales have constricted domestic supply. The market has been especially tight for the past three weeks with little-to-no spot material available.

Earlier this month, Westlake Chemical said that it would not be able to provide spot material from its Mississippi and Ohio river system terminals during April because of tight supply.

Spot barge prices have risen about $50/dst since the beginning of the year, and spot exports have risen by about $50/dmt. Contract accounts are heard to be accepting price increases of $40/dst and higher for April business.

The force majeure was caused by heavy rains that flooded Point Comfort Tuesday morning, the company said.

Other major US chlor-alkali producers include Occidental Chemical, Olin, Westlake Chemical and Shintech.